Quebec firms training more but not improving bottom line
A Quebec government program that requires employers to spend a minimum amount on training each year has led to an increase in T&D, but is not improving bottom-line performance, states a new study.
The study compared training levels in Ontario and Quebec. In the latter, all employers with a payroll of more than $250,000 must spend one per cent of payroll on training. Firms that don’t spend it on training must pay it to the government which uses the money to fund T&D programs.
The findings revealed firms in Ontario spend consistently less on training but the greater investments in Quebec seem to have little effect on firm profits.
Robert Haccoun, a professor of HR at York University, presented Legislated Investment in Training: Does it Make a Difference?, to the Society for Industrial and Organizational Psychology’s conference in Toronto, last month. He said that he was surprised to see Ontario was trailing Quebec mainly because the minimum spending required by the Quebec government is so small.
“I just don’t think one per cent of payroll is a huge amount of money and I thought that everyone does that. I was sure (Ontario firms) were going to spend at least that.”
On average, Quebec firms are exceeding minimum spending levels. Haccoun said he was “mildly surprised” at this (for spending levels see chart page 12). The higher than expected spending indicates that “Quebec firms seem to be following the spirit of the law and not just the letter,” he said.
And while it is widely believed that by improving competencies through training organizations will also ultimately enjoy better bottom-line results, the information gathered suggests that the effect on organizational performance (using profit per employee) is minimal. “There is no clear evidence that this has impacted on firm profit,” said Haccoun, who completed the study with Alan Saks also a professor of HR at York University.
Using data from Statistics Canada’s Workplace and Employee Survey, they grouped training practices into programs designed to develop soft skills and hard skills. Quebec appears more focused on hard skill training, said Haccoun. “The differences are not huge but they are there.”
The study also revealed that on-the-job training levels are roughly equal between the two provinces but in Quebec a higher proportion of employees are receiving classroom training.
Lynn Johnston, executive director of the Ontario Society for Training and Development said she doesn’t think Ontario needs laws requiring firms to spend a minimum amount on training.
“I don’t know that we would need to call for legislation (in Ontario),” said Johnston. Instead the government should introduce a framework to encourage training and recognize it as an important initiative for companies.
“We should work more toward encouraging the market to recognize what (training) can do for the industry,” she said. “As for a mandated amount, I think it says it all that in Quebec they are spending more than the mandated amount.”
Florent Francoeur, directeur général of the Quebec HR association, Ordre des conseillers en ressources humaines et en relations industrielles agréés du Québec, said the program has had a positive effect on the province. A few years ago, a lot of companies didn’t do any training, he said. The Act to Foster the Development of Manpower Training, passed in 1995, is intended to improve the qualifications, skills and performance of workers through continuing education.
“Now more and more companies try to do at least the one per cent,” he said. While the legislation has convinced many organizations to do more training, others dislike the red tape and decide instead to pay the money directly to the government. “Many think it is too complicated. They have to keep bills and proof of training. Sometimes, even if they do the training, they think it is easier to send the cheque to the government.”
For HR professionals in the province, it means there are more jobs for training specialists, said Francouer. Seven or eight years ago it was rare to find a training specialist in a senior HR position, now it is common and fully 10 per cent of the jobs listed with the association’s employment service are for training positions, he said.
Haccoun said that the absence of conclusive evidence that increasing training improves corporate performance raises some interesting questions.
“You have to ask yourself what is going on,” he said.
One explanation may simply be that there are many other factors that influence profit and general economic conditions could be blamed. “How much can we expect one thing to do?” asked Haccoun.
However, it also raises important questions about the quality of training.
“It goes to the heart of the issue of how good a job are we doing in training,” he said. “There is a concern that we may not be doing a very good job.”
One possible flaw may be in the way training is assessed. In most cases when an employee completes the course it is considered a success and little thought is given to how it will be applied. Training has to change behaviours in the workplace and employees have to be given the confidence to apply it, Haccoun said.
And ultimately employers have to get a better sense of the true cost of training. Simply sending somebody away on a course won’t be effective unless the employer is also willing to reduce productivity demands when the employee comes back to allow time to get accustomed to applying the learning in the workplace.
Despite the fact the legislation in Quebec appears to have little impact on corporate performance, the theory behind it is still a good one. Mandating training is a step in the right direction, but leaving it at that minimizes the impact, he said.
The study compared training levels in Ontario and Quebec. In the latter, all employers with a payroll of more than $250,000 must spend one per cent of payroll on training. Firms that don’t spend it on training must pay it to the government which uses the money to fund T&D programs.
The findings revealed firms in Ontario spend consistently less on training but the greater investments in Quebec seem to have little effect on firm profits.
Robert Haccoun, a professor of HR at York University, presented Legislated Investment in Training: Does it Make a Difference?, to the Society for Industrial and Organizational Psychology’s conference in Toronto, last month. He said that he was surprised to see Ontario was trailing Quebec mainly because the minimum spending required by the Quebec government is so small.
“I just don’t think one per cent of payroll is a huge amount of money and I thought that everyone does that. I was sure (Ontario firms) were going to spend at least that.”
On average, Quebec firms are exceeding minimum spending levels. Haccoun said he was “mildly surprised” at this (for spending levels see chart page 12). The higher than expected spending indicates that “Quebec firms seem to be following the spirit of the law and not just the letter,” he said.
And while it is widely believed that by improving competencies through training organizations will also ultimately enjoy better bottom-line results, the information gathered suggests that the effect on organizational performance (using profit per employee) is minimal. “There is no clear evidence that this has impacted on firm profit,” said Haccoun, who completed the study with Alan Saks also a professor of HR at York University.
Using data from Statistics Canada’s Workplace and Employee Survey, they grouped training practices into programs designed to develop soft skills and hard skills. Quebec appears more focused on hard skill training, said Haccoun. “The differences are not huge but they are there.”
The study also revealed that on-the-job training levels are roughly equal between the two provinces but in Quebec a higher proportion of employees are receiving classroom training.
Lynn Johnston, executive director of the Ontario Society for Training and Development said she doesn’t think Ontario needs laws requiring firms to spend a minimum amount on training.
“I don’t know that we would need to call for legislation (in Ontario),” said Johnston. Instead the government should introduce a framework to encourage training and recognize it as an important initiative for companies.
“We should work more toward encouraging the market to recognize what (training) can do for the industry,” she said. “As for a mandated amount, I think it says it all that in Quebec they are spending more than the mandated amount.”
Florent Francoeur, directeur général of the Quebec HR association, Ordre des conseillers en ressources humaines et en relations industrielles agréés du Québec, said the program has had a positive effect on the province. A few years ago, a lot of companies didn’t do any training, he said. The Act to Foster the Development of Manpower Training, passed in 1995, is intended to improve the qualifications, skills and performance of workers through continuing education.
“Now more and more companies try to do at least the one per cent,” he said. While the legislation has convinced many organizations to do more training, others dislike the red tape and decide instead to pay the money directly to the government. “Many think it is too complicated. They have to keep bills and proof of training. Sometimes, even if they do the training, they think it is easier to send the cheque to the government.”
For HR professionals in the province, it means there are more jobs for training specialists, said Francouer. Seven or eight years ago it was rare to find a training specialist in a senior HR position, now it is common and fully 10 per cent of the jobs listed with the association’s employment service are for training positions, he said.
Haccoun said that the absence of conclusive evidence that increasing training improves corporate performance raises some interesting questions.
“You have to ask yourself what is going on,” he said.
One explanation may simply be that there are many other factors that influence profit and general economic conditions could be blamed. “How much can we expect one thing to do?” asked Haccoun.
However, it also raises important questions about the quality of training.
“It goes to the heart of the issue of how good a job are we doing in training,” he said. “There is a concern that we may not be doing a very good job.”
One possible flaw may be in the way training is assessed. In most cases when an employee completes the course it is considered a success and little thought is given to how it will be applied. Training has to change behaviours in the workplace and employees have to be given the confidence to apply it, Haccoun said.
And ultimately employers have to get a better sense of the true cost of training. Simply sending somebody away on a course won’t be effective unless the employer is also willing to reduce productivity demands when the employee comes back to allow time to get accustomed to applying the learning in the workplace.
Despite the fact the legislation in Quebec appears to have little impact on corporate performance, the theory behind it is still a good one. Mandating training is a step in the right direction, but leaving it at that minimizes the impact, he said.
